Question: Chick-fil-A is preparing its aggregate plan for the first six months of 2023. The tables below contain the monthly demand forecast, working days per month,
Chick-fil-A is preparing its aggregate plan for the first six months of 2023. The tables below contain the monthly demand forecast, working days per month, and cost information.
| Month | Expected Demand | Production Days |
| January | 180 | 20 |
| February | 160 | 20 |
| March | 220 | 10 |
| April | 150 | 10 |
| May | 250 | 25 |
| June | 240 | 15 |
| Inventory carrying cost | 15 per unit per month |
| Subcontracting cost per unit | 30 per unit |
| Regular working hours per day | 8 hours |
| Labor-hours to produce a unit | 2 hours/unit |
| Average pay rate | 10 per hour |
| Overtime pay rate | 15 per hour |
| Cost of increasing daily production rate (hiring and training) | 150 per unit |
| Cost of decreasing daily production rate (layoffs) | 200 per unit |
The company is considering the following three strategies:
Plan 1: A constant workforce, daily production rate = average requirements Plan 2: Main a constant workforce at a necessary level to meet the lowest demand month, and to meet all demand above this level by subcontracting. Plan 3: Hire and layoff workers as needed to produce exact requirements.
Please answer the following questions: (hint: all numbers are integer, no decimal places are needed)
The average requirements (average daily demand) is _______ units/day.
For Plan 1: The monthly inventory change in February is _________ units. The monthly inventory change in May is _________units. The ending inventory in March is _________ units. The total inventory carrying cost is $_________. The total cost is $__________.
For Plan 2: Chick-fil-A needs to hire ________ workers to maintain the workforce. The production rate is ___________ units/day. The total in-house production is _______units. The total subcontracting cost is $________. The total cost is $________.
For plan 3: The total hiring cost is $________. The total layoff cost is $________. The total cost is $________.
Plan ________ is the best plan.
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